The UK stock market is home to some of the finest dividend stocks on the planet, with some businesses quietly hiking their payouts year after year, sometimes for decades.
Croda International (LSE:CRDA) is a prime example of such an enterprise, with management raising shareholder payouts for 35 years in a row. And at its current share price of 2,778p paired with a 4% yield, buying 1,892 shares right now would instantly unlock a passive income of £2,100 a year, or £175 a month.
Of course, executing this transaction would cost a hefty £52,559.76. And while a more modest investor can steadily build up this position over time rather than buying all at once, there are other higher-yield opportunities out there.
However, it’s not the yield that makes Croda interesting. It’s the group’s habit of continuously raising dividends each year. And that means the £175 monthly passive income could quietly become significantly larger over the long run.
So, is this a no-brainer?
A promising opportunity
As a quick crash course, Croda is a speciality chemicals group supplying high-value ingredients to the consumer care, life sciences, and crop protection industries.
These aren’t commodity chemicals. They’re precisely engineered formulations embedded deep in customer products, which has translated into higher switching costs and durable pricing power.
That said, the past few years have been genuinely tough.
A prolonged destocking cycle across the personal care and agrochemical industries hammered order volumes throughout 2023 and 2024, sending Croda’s share price to multi-year lows and testing the patience of even its most loyal shareholders.
But the tide appears to be turning. Order patterns are now normalising across key end markets, and management’s focus on margin recovery is beginning to bear fruit.
That’s a meaningful shift from where the business stood just 12 months ago. And looking further ahead, institutional analysts point to Croda’s life sciences division as the most exciting long-term growth driver.
Demand for lipid delivery systems used in mRNA vaccines and gene therapies is structural and accelerating. With the global biologics market expected to grow substantially over the next decade, Croda is quietly positioned at the heart of what could be one of healthcare’s most important long-term tailwinds.
So, is now the time to consider adding this stock to my portfolio?
What’s the catch?
The recovery story is genuinely compelling. But it would be wrong to pretend the risks aren’t real.
Croda’s turnaround remains in its early stages. And if destocking pressures were to return across the personal care or agrochemical supply chains, the earnings rebound investors are hoping for could be pushed further out than expected.
That’s a significant risk given the fragile global macroeconomic backdrop, especially in Asia, where demand remains persistently soft.
So, where does that leave investors today?
Personally, I think the combination of a 35-year dividend growth track record, a near-4% yield locked in while the share price remains under pressure, and a genuinely exciting long-term growth opportunity in life sciences, makes Croda one of the more interesting dividend stocks available in the UK market right now.
The risks are real. But for patient, long-term income investors, it might be worth considering.
Should you invest £5,000 in Croda International Plc right now?
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Zaven Boyrazian does not hold any positions in the companies mentioned.
